It’s a very real dilemma facing the Santa Clara County Open Space Authority, a San Jose government agency set up nearly 20 years ago to preserve parkland. This month, the state Supreme Court struck down a $20 per-parcel fee the agency put in place in 2001, nullifying more than half its annual budget.

On Friday, the open space authority’s general manager, Patrick Congdon, said he expects the agency will give the money back – roughly $135 for every homeowner within the district’s boundaries, which include San Jose, Campbell, Milpitas, Morgan Hill and Santa Clara, as well as much of unincorporated Santa Clara County.

But don’t expect a check in the mail next week.

“It’s going to be a complex process,” Congdon said.

Major questions remain unanswered. More than 250,000 property owners are affected. Yet many have moved away in the six years the assessment has been collected on Silicon Valley property tax bills. Others have died. And new people have moved in.

The answers are likely to come in the next two months, Congdon said.

That’s when the case will be sent back to the Santa Clara County Superior Court where the suit was first filed in 2002 by the Silicon Valley Taxpayers’ Association.

Working out details

The judge there is expected to decide whether each property owner will get an automatic credit on their property tax bill, or whether people will be required to send in a letter or voucher to receive the refund. The judge will also decide what to do with money paid by property owners who can’t be located, who’ve died, or who want to donate it to the open space agency, as well as whether to refund only the $52 million collected, or also the $4 million earned in interest.

“Our position is that we’d like to see all the money returned to taxpayers. It was collected illegally,” said Doug McNea, president of the Silicon Valley Taxpayers’ Association. “The court determined it was an unjust tax, so it’s only logical.”

The court essentially agreed with the taxpayers group that the assessment violated Proposition 218, a measure passed by state voters in 1996. Because the funding benefited the whole county, the assessment was essentially a tax and should have been approved by all county voters, not just the property owners who turned in special ballots in a 2001 mail-in election, the court found.

“We think it is a severe setback to the interests of open space in the future,” said Mary Davey, a board member of the Midpeninsula Regional Open Space District, a public agency that buys land from the Los Gatos Hills to Belmont.

Davey said that without the money, the open space agency will not be able to buy land or development rights around places like Coyote Valley, the Mount Hamilton foothills and Sargent Ranch, a huge parcel south of Gilroy.

Although polls show that valley residents generally favor environmental causes, the open space authority is suddenly cash-poor. Its primary remaining source of funding is a $12 per year assessment from 1994 that has been upheld by courts. That brings in $4 million a year, hardly enough to buy significant-sized lands. It lost $8 million a year in the court ruling.

If it wants more, it will have to go back to voters. And it must win a two-thirds majority, as required for new taxes under Proposition 218 and its predecessor, landmark Proposition 13 from 1978.

“The two-thirds margin makes it a lot tougher. The question is not do people love parks. People do. The question is do two-thirds of the people love parks?” said Tim Ahern, spokesman for the Trust for Public Land, a land preservation group in San Francisco.

Bouncing back

Congdon said his agency’s seven-member board will be studying everything from a sales tax to a parcel tax. But he said he doesn’t expect anything to be placed on the ballot this year, or perhaps even by 2010 until he, board members and park lovers meet with Santa Clara County farm groups, taxpayer groups, business leaders and others to find some consensus that might have a chance at clearing the two-thirds standard at the ballot box.

Going forward, Congdon said he will highlight that the agency has preserved 14,494 acres for the public and wildlife, expanding green space around Calero Reservoir, Alum Rock Park and Henry W. Coe State Park in Morgan Hill.

“I think we have done some really good things,” Congdon said. “We feel confident that we should move forward and pursue additional funding.”

Other agencies have had a mixed record winning two-thirds. In 2000, Santa Clara County voters approved a half-cent sales tax designed to bring BART to San Jose by a 70 percent margin. On the same ballot, they approved a $39 parcel tax by 67 percent to fund flood control and creek restoration. But economic times were better then.

Voters in San Mateo County rejected a one-eighth-cent sales tax increase for parks in 2006, giving it only 55 percent support, and again this June, giving it 60 percent.

Getting the votes

Ironically, the city and county leaders who first helped set up the Santa Clara County Open Space Authority in the late 1980s knew then that two-thirds would pose perhaps an insurmountable bar for the new agency. They put a $25 parcel tax on the ballot in 1990, and even though it was backed by business groups, with David Packard as co-chairman, it failed with only 63 percent.

“We were very concerned it would be in vain,” said former San Jose Councilwoman Judy Stabile. “We knew Prop. 13 was here to stay, but we knew we were going to have to try or see more of the hillsides developed.”

After that 1990 loss, the agency’s board, led for a time by now-Congressman Mike Honda, turned to the benefit assessment – a fee paid by property owners for a specific government service such as street lights – which Los Angeles had successfully passed in 1992 with only a majority vote. After getting the $12 assessment approved in 1994, the agency made the error of trying for a $20 assessment in 2000, after taxpayer groups passed Proposition 218 in 1996. This put sharper limits on the agency’s approach and ultimately led to the court challenge.

Now the long-struggling agency will start over.

“People should understand we are around for the long haul,” Congdon said. “We’ll do things differently. We’ve learned from this. We don’t want to repeat history.”

Paul Rogers has covered a wide range of issues for The Mercury News since 1989, including water, oceans, energy, logging, parks, endangered species, toxics and climate change. He also works as managing editor of the Science team at KQED, the PBS and NPR station in San Francisco, and has taught science writing at UC Berkeley and UC Santa Cruz.

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